Tag: ppaca

Tennessee Rejects an ObamaCare Exchange

Yet another state seems poised to lure employers away from Mississippi. Excerpts from Tennessee Gov. Bill Haslam’s press release:

Tennessee faces a decision this week about health insurance exchanges created by the Affordable Care Act.

I’m not a fan of the law.  The more I know, the more harmful I think it will be for small businesses and costly for state governments and the federal government.  It does nothing to address the cost of health care in our country.  It only expands a broken system…

Since the presidential election, we’ve received 800-plus pages of draft rules from the federal government, some of which actually limit state decisions about running an exchange more than we expected.

The Obama administration has set an aggressive timeline to implement exchanges, while there is still a lot of uncertainty about how the process will actually work.  What has concerned me more and more is that they seem to be making this up as they go.

In weighing all of the information we currently have, I informed the federal government today that Tennessee will not run a state-based exchange.  If conditions warrant in the future and it makes sense at a later date for Tennessee to run the exchange, we would consider that as an option at the appropriate time.

NJ Gov. Vetoes ObamaCare Exchange; SD Gov. Rejects Medicaid Expansion

On the same day he met with President Barack Obama (D) at the White House, New Jersey Gov. Chris Christie (R) vetoed a bill that would have implemented a key part of ObamaCare:

New Jersey Gov. Chris Christie (R) became the latest state chief executive to rebuff President Barack Obama’s health care reform law Thursday by vetoing a bill that would have created an online marketplace for uninsured residents to shop for health insurance.

For the second time this year, Christie rejected legislation passed by New Jersey’s Democratic-controlled legislature that would have established a state-run health insurance exchange under Obamacare.

Meanwhile, South Dakota Gov. Dennis Daugaard (R) said his state will not implement ObamaCare’s Medicaid expansion:

There are far too many unanswered questions for me to recommend adding 48,000 adults to the 116,000 already on our rolls.

The Huffington Post reports that 19 states have refused to establish an Exchange, and 9 states have refused to expand Medicaid. I’ve heard higher counts, though.

Adler Dresses Down PolitiFact-Georgia over Embarrassing ‘Fact-Check’

At the Volokh Conspiracy, my occasional co-author Jonathan Adler dresses down PolitiFact-Georgia for declaring “falsemy claim that Georgia law prohibits state employees from implementing an ObamaCare Exchange. If you place faith in “fact checkers,” you might not want to read it. My response to PolitiFact-Georgia is here.

Laszewski on ObamaCare: ‘Get Ready for Some Startling Rate Increases’

The invaluable Robert Laszweski:

The Affordable Care Act: Ten Months to Launch “Obamacare”––Get Ready for Some Startling Rate Increases

[…]

I conducted an informal survey of a number of insurers…None of the people I talked to are academics or work for a think tank. None of them are in the spin business inside the Beltway. Every one of them has the responsibility for coming up with the correct rates their companies will have to charge…

On average, expect a 30% to 40% increase in the baseline cost of individual health insurance to account for the new premium taxes, reinsurance costs, benefit mandate increases, and underwriting reforms…

In states with the least mandates or for health insurance companies with the tightest underwriting now, the increase could be a lot more…

[E]xpect individual health insurance rates for people in their 20s and early 30s to about double…

Will the feds be ready to provide an insurance exchange in all of the states that don’t have one on October 1, 2013?

I have no idea. And neither does anyone else I talk to inside the Beltway. We only hear vague reports that parts of the new federal exchange information systems are in testing.

The former CIA director couldn’t get away with an affair in this town but the Obama administration has a complete lid on just where they are on health insurance exchanges and haven’t shown any willingness to want to talk about their progress toward launching on time––except to tell us all not to worry.

We are all worried. I would not want to be responsible for the work that remains and only have ten months to do it…

The Republicans said this would not work. If it does not launch on time, or does with serious problems, I would not want to be an incumbent Democrat.

I told them not to call this the “Affordable Care Act.”

ObamaCare’s Magical Premium Tax

The Department of Health and Human Services has announced it will unilaterally impose a (legally questionable) 3.5-percent premium tax on health plans purchased through the ObamaCare Exchanges it operates.

According to The New York Times, an HHS spokeswoman “predicted that insurers would not raise prices” in response to the tax.

If that’s the case, why not make it 35 percent?

Does HHS Have the Authority to Tax Health Premiums in Federal Exchanges?

Remember how an adviser to the federal Department of Health and Human Services said the department would have to “get creative” on funding federal health insurance exchanges, because states were refusing to create their own and ObamaCare provides no source of funding for federal exchanges? Well, HHS released its very creative response in a Friday news dump today, and the answer is “user fees” of 3.5 percent on all health insurance plans sold through federal exchanges.

But is that a little too creative? Does HHS have the authority to tax health premiums in its exchanges? Here’s what the department’s proposed regulation says:

Federally-facilitated Exchange user fees: Section 1311(d)(5)(A) of the Affordable Care Act contemplates an Exchange charging assessments or user fees to participating issuers to generate funding to support its operations. As the operator of a Federally-facilitated Exchange, HHS has the authority, under this section of the statute, to collect and spend such user fees. In addition, 31 U.S.C. 9701 provides for an agency to establish a charge for a service provided by the agency. Office of Management and Budget Circular A-25 Revised (“Circular A-25R”) establishes Federal policy regarding user fees and specifies that a user charge will be assessed against each identifiable recipient for special benefits derived from Federal activities beyond those received by the general public. In this proposed rule, we establish a user fee for issuers participating in a Federally-facilitated Exchange.

I don’t know anything about 31 U.S.C. 9701 or Circular A-25R. But here’s the Section 1311(d)(5)(A) language upon which they rely:

NO FEDERAL FUNDS FOR CONTINUED OPERATIONS.—In establishing an Exchange under this section, the State shall ensure that such Exchange is self-sustaining beginning on January 1, 2015, including allowing the Exchange to charge assessments or user fees to participating health insurance issuers, or to otherwise generate funding, to support its operations.

A few thoughts:

  1. It is interesting that when the federal government wants to justify generating funds for their Exchanges’ operational expenses, they cite for authority a paragraph titled, “NO FEDERAL FUNDS FOR CONTINUED OPERATIONS.”
  2. The proposed regulation correctly notes that Section 1311(d)(5)(A) only “contemplates” state Exchanges charging assessments. It certainly doesn’t authorize states to make such assessments; states already have the authority to impose such levies. (They are states, after all.) Nor does it even direct states to levy user fees. It says, in essence, “You gotta fund this yourself. Here are a couple of methods. Knock yourselves out.” Since Section 1311(d)(5)(A) doesn’t give states the authority to levy such taxes, it’s hard to see how that paragraph translates into “HHS has the authority, under this section of the statute, to collect and spend such user fees” (emphasis added).
  3. Section 1311(d)(5)(A) speaks specifically of states. It makes no mention of the federal government. Lest anyone think its mention of “an Exchange” could refer to state or federal exchanges, I refer you four paragraphs up to Section 1311(d)(1), which imposes another “REQUIREMENT … An Exchange shall be a governmental agency or nonprofit entity that is established by a State.” Or is the federal government again claiming that it can establish an Exchange that is established by a state?

Again, I don’t know anything about 31 U.S.C. 9701 or Circular A-25R. But the fact that HHS also cited them makes me think they lack confidence in their claim that Section 1311(d)(5)(A) authorizes them to do this. And the fact that they listed them after their Section 1311(d)(5)(A) claim makes me wonder if they even weaker.

I’ll be looking into this. But I would be interested to hear from anyone with expertise in 31 U.S.C. 9701 or Circular A-25R.